Costco is famous for bulk bargains and low prices, from groceries to electronics. But did you know your Costco membership could also unlock savings on your next car? Since 1989, the Costco Auto Program has offered members exclusive pricing on new and certified pre-owned vehicles. If the idea of car dealerships and haggling fills you with dread, Costco’s program might seem like a stress-free solution.
But is the Costco Auto Program really worth it? As car experts at carcodereader.store, we’ve taken a deep dive into the program to give you a comprehensive review. We’ll explore the pros and cons, how it works, and whether it actually saves you money in the long run.
Image: Profile picture of Katie Lowery, contributing editor, representing author expertise.
What Exactly is the Costco Auto Program?
It’s important to clarify: you’re not buying a car directly from Costco warehouses alongside your groceries and tire rotations. The Costco Auto Program is essentially a referral service. It connects Costco members with a network of over 3,000 participating dealerships across the United States and Puerto Rico. These dealerships offer pre-negotiated, member-only pricing and incentives.
Think of Costco as the middleman, vetting dealerships for customer service and negotiating pricing on your behalf. You are limited to dealerships within the Costco network, but this network is quite extensive.
The program covers both new and certified pre-owned vehicles, and participating dealerships can also handle your trade-in. You can even use the program for leasing and purchasing RVs. The core promise is a simpler, potentially cheaper car buying experience thanks to Costco’s negotiated rates and focus on customer satisfaction. Dealerships with low customer service scores are excluded, and Costco even has a Member Advocacy group to assist with any dealer issues.
Step-by-Step: How to Use the Costco Auto Program
Using the Costco Auto Program isn’t as simple as showing your membership card at any dealership. Here’s a breakdown of the process to access member-exclusive deals:
1. Start Your Car Search Online
Begin by visiting the Costco Auto Program website. Enter your ZIP code and select whether you’re interested in a “New” or “Pre-Owned” vehicle to initiate your search. You can then refine your search by specifying the model, year, make, and trim level you’re interested in. The website also offers resources to research and compare different vehicles.
For pre-owned vehicles, the process is slightly different. Instead of selecting a specific vehicle upfront, you’ll browse the inventories of participating dealerships in your area. The underlying principle remains the same: connecting you to member-only deals.
Once you’ve identified a vehicle that interests you, you’ll be prompted to provide your name, contact details, and Costco membership number to proceed.
2. Connect with a Participating Dealership
After selecting your desired vehicle online, you’ll be presented with a list of approved dealerships that have the car in stock. Choose a dealership from this list and contact them to schedule an appointment. It’s crucial to contact the dealership through the Costco Auto Program link to ensure you’re connected with their Costco-authorized personnel.
3. Visit the Dealership and Review Your Costco Price
When you arrive at the dealership for your appointment, you will be introduced to a designated Costco Authorized Dealer Contact. These individuals are specifically trained and authorized to work with Costco members. They will provide you with a Costco Member-Only Price Sheet. This sheet details the prearranged price for the vehicle, exclusively available through the Costco Auto Program.
Review the price sheet carefully. You are under no obligation to purchase the car after seeing the Costco price. This step allows you to see the member-exclusive deal before making any commitments. This is a crucial step to determine if the program is truly worthwhile for you.
Image: Exterior shot of a car dealership, representing the location where Costco Auto Program transactions occur.
4. Secure Financing (If Needed)
Whether you use the Costco Auto Program or not, you’ll still need to arrange financing unless you’re paying cash. It’s wise to compare financing options independently. Online marketplaces, like LendingTree’s auto loan marketplace, can help you compare offers from multiple lenders, potentially securing a better interest rate than the dealership might initially offer. Comparing rates beforehand empowers you to make informed financial decisions, regardless of using the Costco Auto Program for the vehicle purchase itself.
Weighing the Pros and Cons: Is Costco Auto Program a Good Deal?
The Costco Auto Program promises a smoother car buying experience and potential savings. However, it’s not a perfect solution for everyone. Let’s break down the key advantages and disadvantages to help you decide if it’s the right path for your next car purchase and answer the core question: is the Costco car program worth it?
Costco Auto Program: The Upsides (Pros)
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Streamlined and Simplified Car Buying: The pre-negotiated pricing significantly simplifies the dealership experience. The Costco Member-Only Price Sheet should be readily available when you arrive, reducing the back-and-forth negotiation process. This can save you considerable time and stress at the dealership.
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Helpful Online Research Tools: Costco’s Auto Program website provides useful tools for comparing vehicles side-by-side, reviewing car specifications, and accessing car reviews. They also offer a car finance calculator to estimate monthly payments, aiding in your budgeting and vehicle selection process.
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Emphasis on Customer Service: Dealerships participating in the Costco Auto Program are vetted for high customer service standards. Costco actively monitors dealer performance through secret shoppers and member feedback. This focus on customer satisfaction provides a safety net and potentially a more pleasant buying experience compared to typical dealerships.
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Exclusive Member Deals and Incentives: While Costco doesn’t publish average savings figures, they do advertise limited-time specials and manufacturer incentives specifically for Costco members. These exclusive deals can add significant value to the program, potentially leading to substantial savings beyond the pre-negotiated price.
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Discounts Beyond the Purchase Price: The benefits extend beyond just buying a car. Costco members can also receive discounts (up to 15%) on car parts, service, and accessories at participating service centers. This ongoing savings on maintenance and upkeep further enhances the value proposition of the Costco membership for car owners.
Costco Auto Program: The Downsides (Cons)
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Costco Membership Requirement: To access the program, you must be a Costco member. A Gold Star membership costs $60 annually, and an Executive membership is $120. If you’re not already a member, you need to factor this cost into your potential savings to determine if the program is truly cost-effective. If the car savings don’t outweigh the membership fee, it might not be worth it.
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Lack of Upfront Price Transparency: You don’t see the Costco pre-negotiated price until you visit the dealership. This lack of upfront pricing requires you to invest time visiting dealerships to discover the actual savings. If you are comparing multiple makes and models, this can involve visiting several dealerships before you have concrete pricing information, which can be inconvenient.
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Limited Dealership Network: Not all dealerships participate in the Costco Auto Program. This limits your choices to dealerships within the Costco network. Furthermore, even at participating dealerships, you must work with their Authorized Dealer Contact, which might require waiting for their availability. This restricted network could mean you might not find the exact make, model, or trim you desire within the program.
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Vehicle Selection Limitations: The Costco Auto Program doesn’t guarantee deals on every make, model, and trim level. Availability depends on participating dealerships’ stock and what they can order from manufacturers. You might find limited options or discover that the specific car you want isn’t available through the program.
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Potential for Haggling on Add-ons: While the vehicle price itself is pre-negotiated, dealerships can still try to sell you extras like extended warranties, paint protection packages, or other add-ons. You might still need to negotiate to decline unwanted add-ons and ensure they are removed from your final bill. This can reintroduce some of the haggling that the program aims to eliminate.
Alternatives to the Costco Auto Program
Buying a vehicle is a major financial decision. Exploring different approaches ensures you find the best deal and the most comfortable buying process for you. If the Costco Auto Program doesn’t quite fit your needs, consider these alternatives:
1. Negotiate Directly with Dealerships
For those comfortable with negotiation, directly haggling with dealerships can potentially yield similar or even better savings than pre-negotiated programs. This approach offers maximum flexibility, allowing you to shop at any dealership and potentially leverage competition between dealers to secure the lowest price. However, this method requires time, research, and negotiation skills.
2. Utilize a Car Broker
Car brokers act as professional car buyers working on your behalf. They can locate vehicles, negotiate prices, and handle much of the car buying process for you. Brokers charge a fee for their services, but their expertise and negotiation skills can potentially save you money and time in the long run. It’s important to compare broker fees and potential savings to determine if this option is worthwhile.
3. Explore Competitor Car Buying Programs
Several other car buying programs exist. TrueCar is a popular, free platform that provides price comparisons and connects you with certified dealerships. AAA also offers an Auto Buying Program similar to Costco’s, providing member-exclusive deals through participating dealerships. Navy Federal Credit Union, in partnership with TrueCar, offers a car buying service for its members as well. Exploring these competitor programs can provide more options and potentially better deals depending on your specific circumstances and memberships.
Is the Costco Car Program Worth It? The Verdict
So, is the Costco car program worth it? The answer is: it depends.
For existing Costco members who value a streamlined, less stressful car buying experience and appreciate pre-negotiated pricing, the Costco Auto Program can be a valuable tool. The potential for exclusive deals, enhanced customer service, and discounts on maintenance add to its appeal. If you dislike haggling and prioritize convenience, it’s certainly worth exploring.
However, if you are solely considering a Costco membership just for the car program, you need to carefully weigh the potential savings against the membership cost and the program’s limitations. The lack of upfront pricing transparency and potential vehicle selection restrictions mean it’s not a guaranteed home run for everyone.
Ultimately, the best approach is to research and compare. Check Costco Auto Program prices against TrueCar, consider negotiating yourself, and explore all your options. The “worth” of the Costco Car Program is subjective and depends on your individual needs, negotiation skills, and the specific vehicle you’re seeking. It’s a useful resource, but informed comparison shopping remains key to getting the best possible deal on your next car.
